The following book and fair values were available for NorthStar Company as of March 1. Book value Fair value Inventory $ 630,000 $ 600,000 Land 750,000 990,000 Buildings 1,700,000 2,000,000 Customer relationships –0– 800,000 Accounts payable (80,000) (80,000) Common stock (2,000,000) Additional paid-in capital (500,000) Retained earnings, 1/1 (360,000) Revenues (420,000) Expenses 280,000 BluePrint Company pays $4,200,000 cash for all of NorthStar’s common stock in a merger, after which NorthStar will cease to exist as a separate entity. BluePrint pays $70,000 for legal fees to complete the transaction. Required: Pass the necessary journal entries in the books of BluePrint for its acquisition of NorthStar’s common stocks. please attempt if 100% sure need correct and complete answer with everything thanks
The following book and fair values were available for NorthStar Company as of March 1. Book value Fair value Inventory $ 630,000 $ 600,000 Land 750,000 990,000 Buildings 1,700,000 2,000,000 Customer relationships –0– 800,000 Accounts payable (80,000) (80,000) Common stock (2,000,000) Additional paid-in capital (500,000) Retained earnings, 1/1 (360,000) Revenues (420,000) Expenses 280,000 BluePrint Company pays $4,200,000 cash for all of NorthStar’s common stock in a merger, after which NorthStar will cease to exist as a separate entity. BluePrint pays $70,000 for legal fees to complete the transaction. Required: Pass the necessary journal entries in the books of BluePrint for its acquisition of NorthStar’s common stocks. please attempt if 100% sure need correct and complete answer with everything thanks
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The following book and fair values were available for NorthStar Company as of March 1.
|
|
Book value |
Fair value |
|
Inventory |
$ 630,000 |
$ 600,000 |
|
Land |
750,000 |
990,000 |
|
Buildings |
1,700,000 |
2,000,000 |
|
Customer relationships |
–0– |
800,000 |
|
Accounts payable |
(80,000) |
(80,000) |
|
Common stock |
(2,000,000) |
|
|
Additional paid-in capital |
(500,000) |
|
|
|
(360,000) |
|
|
Revenues |
(420,000) |
|
|
Expenses |
280,000 |
BluePrint Company pays $4,200,000 cash for all of NorthStar’s common stock in a merger, after which NorthStar will cease to exist as a separate entity. BluePrint pays $70,000 for legal fees to complete the transaction.
Required:
Pass the necessary journal entries in the books of BluePrint for its acquisition of NorthStar’s common stocks.
please attempt if 100% sure need correct and complete answer with everything thanks
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